Up nearly 150 points within the first ten minutes of trading, the Dow Jones Industrial Average eclipsed yesterday's record by a staggering sum, closing within hailing distance of the 13,000 mark at 12,961.98, up 153.35 points at day's end.
Dow 12,961.98 +153.35; NASDAQ 2,526.39 +21.04; S&P 500 1,484.35 +13.62; NYSE Composite 9,697.34 +95.65
Trade was heavily unbalanced to the buy side. Advancing issues led decliners by nearly a 3-1 margin while new highs popped to 507 against merely 65 new lows.
Possible catalysts include Google's stellar earnings report, in which the search and online ad company blew away analyst estimates along with year-ago figures. It's no surprise that the nation's leading technology company would lead to a significant breakout in all sectors, though there have been solid earnings all around.
Friday morning could have been simply an expression of extreme amounts of money not willing to sit idle any longer. Volume was easily the heaviest of the week with heavy money entering right at the open.
The big moves in equities came despite a lack of cooperation from commodities. Oil continues to be a thorny issue, rising $1.55 to close at $63.38. Gold was up $7.50 to $695.80, and silver gained 22 cents to end at $13.96 per ounce.
Perhaps the stock gains and commodity motion were nothing more than adjustment to the value of the US currency, which continues to slide against most other world monies. The US$/Euro ratio is close to $1.36 with no pullback in sight under current policies. The Fed's reluctance to tighten the credit tap is making the currency worth less, so stocks continually have to gain just to keep pace. In the long run, it's a no win situation which needs to be rectified some time soon.
Saturday, April 21, 2007
Thursday, April 19, 2007
Dow Higher 6th Straight Session; Google Beats Street
The Dow stocks added nearly 5 points on top of yesterday's record close to set another all-time high, but the rest of the US indices moved in the opposite direction, once again indicating the thin nature of the current rally.
After the close, internet behemoth Google reported 1st quarter profit gains of 69% over the same period a year ago. The company posted net income of $3.18 a share, up from $1.95 a share in 2006, on sales of $2.53 billion, a cool billion more than in the first quarter last year.
Shares of Google were down 4.36 during the day, but after the announcement, shares soared more than 12 points in after-hours trading.
Dow 12,808.63 -4.79; NASDAQ 2,505.35 -5.15; S&P 500 1,470.73 -1.77; NYSE Composite 9,601.69 -33.18
The Dow stocks actually showed a slight bias to the buy side, with 17 up, 12 down and 1 (Disney) unchanged. All of the moves were fractional. Boeing was the biggest loser, -0.89, followed closely by Exxon-Mobil -0.74. Honeywell was the winner on the day, gaining 0.85.
As has been the case for the past two days, declining issues outnumbered advancers, with the margin widening today to a nearly 2-1 ratio. New highs continue to come down as well, at 287 today, versus a mere 84 new lows.
The conduct of the market is somewhat suspect, especially considering that volume was the best of the week. There just doesn't seem to be much enthusiasm in the trading even as oil took a large hit today, down 1.30 to close at $61.83 per barrel.
Gold and silver both fell, again tantalizingly close to break out levels. Gold lost $5.00 to 688.30, while silver dropped 24 cents to $13.74. The metals have been stuck in a range for well over a year after hitting significant tops in 2006. Only the aspect of serious inflation - which the financial press refuses to report - seems to be enough of a catalyst to move them higher.
As for stocks, the Dow may be serving as a last vestige of worn-out money. Investors seem to have weighed the risks and are neither sold on the robustness of the world economy nor the chance that the Fed will remain on hold much longer.
The sub-prime mortgage blow-up and declining house values nationwide are also a cause for concern in the bigger picture. But the canary in the mine shaft is still breathing, so stocks continue - without much direction - drift aimlessly. The Dow's recent comeback is probably more reaction than rally, as investors re-upped when shares were cheaper a few weeks ago.
Without a significant earnings surprise - positive or negative - this market has all the features of a ship adrift on calm seas. As any good sailor knows, however, optimal conditions don't last forever and storms may arrive without much warning. Caveat Emptor.
After the close, internet behemoth Google reported 1st quarter profit gains of 69% over the same period a year ago. The company posted net income of $3.18 a share, up from $1.95 a share in 2006, on sales of $2.53 billion, a cool billion more than in the first quarter last year.
Shares of Google were down 4.36 during the day, but after the announcement, shares soared more than 12 points in after-hours trading.
Dow 12,808.63 -4.79; NASDAQ 2,505.35 -5.15; S&P 500 1,470.73 -1.77; NYSE Composite 9,601.69 -33.18
The Dow stocks actually showed a slight bias to the buy side, with 17 up, 12 down and 1 (Disney) unchanged. All of the moves were fractional. Boeing was the biggest loser, -0.89, followed closely by Exxon-Mobil -0.74. Honeywell was the winner on the day, gaining 0.85.
As has been the case for the past two days, declining issues outnumbered advancers, with the margin widening today to a nearly 2-1 ratio. New highs continue to come down as well, at 287 today, versus a mere 84 new lows.
The conduct of the market is somewhat suspect, especially considering that volume was the best of the week. There just doesn't seem to be much enthusiasm in the trading even as oil took a large hit today, down 1.30 to close at $61.83 per barrel.
Gold and silver both fell, again tantalizingly close to break out levels. Gold lost $5.00 to 688.30, while silver dropped 24 cents to $13.74. The metals have been stuck in a range for well over a year after hitting significant tops in 2006. Only the aspect of serious inflation - which the financial press refuses to report - seems to be enough of a catalyst to move them higher.
As for stocks, the Dow may be serving as a last vestige of worn-out money. Investors seem to have weighed the risks and are neither sold on the robustness of the world economy nor the chance that the Fed will remain on hold much longer.
The sub-prime mortgage blow-up and declining house values nationwide are also a cause for concern in the bigger picture. But the canary in the mine shaft is still breathing, so stocks continue - without much direction - drift aimlessly. The Dow's recent comeback is probably more reaction than rally, as investors re-upped when shares were cheaper a few weeks ago.
Without a significant earnings surprise - positive or negative - this market has all the features of a ship adrift on calm seas. As any good sailor knows, however, optimal conditions don't last forever and storms may arrive without much warning. Caveat Emptor.
Wednesday, April 18, 2007
Black Eye for Big Blue But Dow Gets New High
Despite disappointment from Dow component IBM (down more than 2 points) on merely meeting analysts' first quarter estimates, the 30 blue chips of the Dow clawed their way to a new all-time high of 12,803.84. The finish was just seven points above the previous high, but it still counts. Hallelujah!
The big winner of the day was Caterpillar (CAT) up more than 2 points on the day and nearly 15% on the year. Along with the heavy equipment manufacturer, JP Morgan Chase (JPM) also added a couple of points (over 4%) to help move the entire average higher.
Without the moves from those two issues, the Dow would never had made it. 16 of the 30 component stocks were down, reflecting a somewhat bearish sentiment even on such a pin-striped, back-slapping kind of day.
The other indices we're exactly on the same page as the Dow, with the S&P and Composite showing marginal gains and the NASDAQ posting a second straight losing session.
Dow 12,803.84 +30.80; NASDAQ 2,510.50 -6.45; S&P 500 1,472.50 +1.02; NYSE Composite 9,634.87 +3.18
Volume was slightly beyond moderate, an indication of nothing more than increased interest in company earnings. Speaking of such, internet pioneer Yahoo got taken out and shot, losing 3.78 (-12%) after missing 1st quarter projections. Yahoo only made 10 cents per share as opposed to 11 in the same period of 2006.
Yahoo's miss was yet another setback in a long string of mistakes and miscues, most of them since startup Google stole most of the search business away. Yahoo has been playing catch-up and has been criticized for being complacent in the marketplace while other competitors ramped up new, innovative products and services.
Internals were a mixed bag, but still evidencing a bearish bias. Decliners beat out advancing issues by a 4-3 margin, and there were fewer new highs for the 2nd straight day, 353, but only 61 issues registered new lows.
Helping the equities at least stay in place, oil barely budged, gaining just 3 cents. Gold and silver were mixed, but both nearly flat.
More earnings tomorrow, and the market is nervous.
The big winner of the day was Caterpillar (CAT) up more than 2 points on the day and nearly 15% on the year. Along with the heavy equipment manufacturer, JP Morgan Chase (JPM) also added a couple of points (over 4%) to help move the entire average higher.
Without the moves from those two issues, the Dow would never had made it. 16 of the 30 component stocks were down, reflecting a somewhat bearish sentiment even on such a pin-striped, back-slapping kind of day.
The other indices we're exactly on the same page as the Dow, with the S&P and Composite showing marginal gains and the NASDAQ posting a second straight losing session.
Dow 12,803.84 +30.80; NASDAQ 2,510.50 -6.45; S&P 500 1,472.50 +1.02; NYSE Composite 9,634.87 +3.18
Volume was slightly beyond moderate, an indication of nothing more than increased interest in company earnings. Speaking of such, internet pioneer Yahoo got taken out and shot, losing 3.78 (-12%) after missing 1st quarter projections. Yahoo only made 10 cents per share as opposed to 11 in the same period of 2006.
Yahoo's miss was yet another setback in a long string of mistakes and miscues, most of them since startup Google stole most of the search business away. Yahoo has been playing catch-up and has been criticized for being complacent in the marketplace while other competitors ramped up new, innovative products and services.
Internals were a mixed bag, but still evidencing a bearish bias. Decliners beat out advancing issues by a 4-3 margin, and there were fewer new highs for the 2nd straight day, 353, but only 61 issues registered new lows.
Helping the equities at least stay in place, oil barely budged, gaining just 3 cents. Gold and silver were mixed, but both nearly flat.
More earnings tomorrow, and the market is nervous.
Tuesday, April 17, 2007
Dow Closes in on Record as NASDAQ Slips
The bidding was frantic on the NYSE, especially on Dow components Johnson & Johnson (JNJ) and Coke (KO) as both companies reported solid earnings for the 1st quarter of '06. Volume on both stocks was nearly triple their average and their contribution to the Dow's gain was obvious, as the other indices were close to the flat line.
Dow 12,773.04 +52.58; NASDAQ 2,516.95 -1.38; S&P 500 1,471.48 +3.01; NYSE Composite 9,631.39 +6.16
Whether the Dow stocks can continue their momentum is open for debate. Solid earnings are providing buying interest, but it seems short-lived. Take for instance, Merck (MRK), which popped nearly 4 points on Friday, but has seemingly run out of steam. It fell 31 cents today. Likewise, Citigroup (C), jumped nearly 1 1/2 points on Monday, but Tuesday saw it end down 40 cents.
The jury is still out on the overall health of the economy, and, particularly, the corporate end of it. The Dow stocks are still safe havens, though the returns are not quite the stuff of dreams, nor are the dividends they spin off, ranging between 2 and 4 percent, hardly keeping pace with inflation.
After the markets closed, IBM reported earnings in line with analyst estimates. The company said it made 1.21 per share, ahead of last years' 1Q 1.08 per share. IBM's picture has been cloudy, though it was one of the top performers during the 2nd half of 2006, in which it ran from the mid 70s to the high 90s, a better-than 30% move.
The computer and technology giant may be somewhat of a proxy for the Dow looking ahead. IBM sees earnings growth of 10-11% for the remainder of 2007. That's OK for a mature companies like Big Blue, but the market will want more.
Peeking under the hood, we see that the trade on Tuesday was not suggestive of further upward momentum. Declining issues actually held a nearly 5-4 edge over advancing ones, though new highs once again popped over 500, at 522, with only 62 issues hitting new lows. That ratio is about as strong as you'll ever see, with close to 8% of all issues trading at new highs. Pretty remarkable, that.
The question is sustainability, though as long as investors can take the continuing slide of the dollar in stride or completely ignore it, this market looks like it's ready to pop to another couple of hundred points. The dollar hit a benchmark against the Pound Sterling today, falling to a value equal to $2 per British Pound, a level last seen in 1992. That's good news for Brits, in a sense, in that their economy was inflating to the point that they're about to raise interest rates. Of course, their American counterparts aren't so circumspect, content to believe that "core" inflation of 2.5% (excluding food and energy - the two elements upon which the entire economy depends) is just fine and dandy.
On that note, the Fed may have some input on May 9, but not any time sooner. Should Bernanke and friends decide to hike rates even a smidgen, the stock markets will tank like so much dead weight. We'll reserve judgment until then.
Oil traders delivered some welcome news, selling off a barrel for 51 cents less than a day ago, closing at $63.10. Gold took some profit taking, dropping $2.00 to $692.50, but still close to 1-year highs. The same for silver, which lost just 6 cents to remain slightly above the $14 mark at $14.02. Both of the precious metals are signaling potential breakouts.
Dow 12,773.04 +52.58; NASDAQ 2,516.95 -1.38; S&P 500 1,471.48 +3.01; NYSE Composite 9,631.39 +6.16
Whether the Dow stocks can continue their momentum is open for debate. Solid earnings are providing buying interest, but it seems short-lived. Take for instance, Merck (MRK), which popped nearly 4 points on Friday, but has seemingly run out of steam. It fell 31 cents today. Likewise, Citigroup (C), jumped nearly 1 1/2 points on Monday, but Tuesday saw it end down 40 cents.
The jury is still out on the overall health of the economy, and, particularly, the corporate end of it. The Dow stocks are still safe havens, though the returns are not quite the stuff of dreams, nor are the dividends they spin off, ranging between 2 and 4 percent, hardly keeping pace with inflation.
After the markets closed, IBM reported earnings in line with analyst estimates. The company said it made 1.21 per share, ahead of last years' 1Q 1.08 per share. IBM's picture has been cloudy, though it was one of the top performers during the 2nd half of 2006, in which it ran from the mid 70s to the high 90s, a better-than 30% move.
The computer and technology giant may be somewhat of a proxy for the Dow looking ahead. IBM sees earnings growth of 10-11% for the remainder of 2007. That's OK for a mature companies like Big Blue, but the market will want more.
Peeking under the hood, we see that the trade on Tuesday was not suggestive of further upward momentum. Declining issues actually held a nearly 5-4 edge over advancing ones, though new highs once again popped over 500, at 522, with only 62 issues hitting new lows. That ratio is about as strong as you'll ever see, with close to 8% of all issues trading at new highs. Pretty remarkable, that.
The question is sustainability, though as long as investors can take the continuing slide of the dollar in stride or completely ignore it, this market looks like it's ready to pop to another couple of hundred points. The dollar hit a benchmark against the Pound Sterling today, falling to a value equal to $2 per British Pound, a level last seen in 1992. That's good news for Brits, in a sense, in that their economy was inflating to the point that they're about to raise interest rates. Of course, their American counterparts aren't so circumspect, content to believe that "core" inflation of 2.5% (excluding food and energy - the two elements upon which the entire economy depends) is just fine and dandy.
On that note, the Fed may have some input on May 9, but not any time sooner. Should Bernanke and friends decide to hike rates even a smidgen, the stock markets will tank like so much dead weight. We'll reserve judgment until then.
Oil traders delivered some welcome news, selling off a barrel for 51 cents less than a day ago, closing at $63.10. Gold took some profit taking, dropping $2.00 to $692.50, but still close to 1-year highs. The same for silver, which lost just 6 cents to remain slightly above the $14 mark at $14.02. Both of the precious metals are signaling potential breakouts.
Monday, April 16, 2007
Stocks Power Ahead as Dow Approaches Record
The Dow closed to within 66 points of its all-time high of 12,786.64 (Feb 20, 2007) on Monday as investors looked positively at Citigroup's somewhat questionable earnings and focused more on robust consumer spending in March, which showed retail sales improving by 0.7%.
What the market and general public may be missing here - and you know there's a caveat to every economic report - is that PPI was up 1% in March and the retail sales numbers are not adjusted for inflation, so there actually was a falloff in sales and the entire rise fueled solely by one factor - inflation.
Nevertheless, the investor class gobbled up shares like mad, boosting prices for everything under the sun.
Dow 12,720.46 +108.33; NASDAQ 2,518.33 +26.39; S&P 500 1,468.47 +15.62; NYSE Composite 9625.53 +102.67
If there's anything like an inflationary cycle, we're witnessing it in the stock market. Prices have to be higher for a number of reasons, not the least of which is the weakened position of the US Dollar in international markets. If the dollar is down, stocks have to go up, just to stay even. Pity the poor European investors who would get hit with the double whammy - if stocks ever were to go down - of a rising Euro and falling share prices.
It's official, now, that stock market moves don't have to actually have any catalyst, somebody will make one up. It seems that the only bad news could come in the form of a Fed rate increase, and they're loathe to do that. Their Wall Street masters would have their heads.
One bright spot on the day was the relative sluggishness of oil, which actually lost 2 cents to close at $63.61 per barrel. It's still overpriced, but every day it doesn't go higher is a good one.
Meanwhile, gold bugs aren't buying any of it. They see inflation raging and have boosted the yellow stuff back up near $700. Gold gained 4.60 today to move to $694.50, close to a breakout. If it goes over $700, the price could top $800 in a very short time. Sister silver, which has seen a pretty good run of its own recently, held above $14 and ounce, losing just a penny to $14.08.
Monday was a strong day for stocks, albeit for the wrong reasons.
What the market and general public may be missing here - and you know there's a caveat to every economic report - is that PPI was up 1% in March and the retail sales numbers are not adjusted for inflation, so there actually was a falloff in sales and the entire rise fueled solely by one factor - inflation.
Nevertheless, the investor class gobbled up shares like mad, boosting prices for everything under the sun.
Dow 12,720.46 +108.33; NASDAQ 2,518.33 +26.39; S&P 500 1,468.47 +15.62; NYSE Composite 9625.53 +102.67
If there's anything like an inflationary cycle, we're witnessing it in the stock market. Prices have to be higher for a number of reasons, not the least of which is the weakened position of the US Dollar in international markets. If the dollar is down, stocks have to go up, just to stay even. Pity the poor European investors who would get hit with the double whammy - if stocks ever were to go down - of a rising Euro and falling share prices.
It's official, now, that stock market moves don't have to actually have any catalyst, somebody will make one up. It seems that the only bad news could come in the form of a Fed rate increase, and they're loathe to do that. Their Wall Street masters would have their heads.
One bright spot on the day was the relative sluggishness of oil, which actually lost 2 cents to close at $63.61 per barrel. It's still overpriced, but every day it doesn't go higher is a good one.
Meanwhile, gold bugs aren't buying any of it. They see inflation raging and have boosted the yellow stuff back up near $700. Gold gained 4.60 today to move to $694.50, close to a breakout. If it goes over $700, the price could top $800 in a very short time. Sister silver, which has seen a pretty good run of its own recently, held above $14 and ounce, losing just a penny to $14.08.
Monday was a strong day for stocks, albeit for the wrong reasons.
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